For some reason, the market took a dislike to yesterday’s outlook issued by Metcash at its AGM in Sydney.
The shares lost more than 3% in a generally upbeat market at one stage, and ended down 2%, or 9c, at $4.32.
Perhaps it was that the company and CEO Andrew Reitzer did nothing but repeat the outlook commentary from the 2010 result on June 1.
Three months has elapsed since then, and there was no update to the guidance for underlying earnings per share in fiscal 2011 is likely to grow 6% to 8%.
That would take underlying earnings to as much as 34.6c per share for the 12 months to April 2011 based on fiscal 2010’s comparative figure of 32c.
Chief executive Andrew Reitzer said trading conditions remained difficult with persistent low inflation for food and liquor and customers who were looking for discounts.
"We expect the subdued sales to continue through to Dec 10 (December 2010)," he said in a slide presentation to shareholders.
Mr Reitzer said Metcash’s earnings would be heavily weighted towards the second half of fiscal 2011.
All what he said in the June 1 statement.
Perhaps investors had been looking for signs that the stronger retail sales in June and July had shown up in the Metcash trading accounts.
Obviously they haven’t.
Perhaps it was the lack of any update to the meeting on the progress of the deal to buy the Franklins chain for $215 million.
Metcash needs ACCC clearance and although the matter is still being market tested and considered by the Commission, the market obviously wants more details.
And it would have been a stunning outcome if the independent expert had found that the AGL Energy bid for Mosaic Oil was not fair and reasonable.
But there was no need for that, the bid is rich, well above the level the company was trading at, and will succeed given that it has the support of the board.
Mosaic said yesterday that a report by PricewaterhouseCoopers Securities Ltd (PWC) found the deal was in the best interests of Mosaic shareholders.
PWC has assessed the fair market value of Mosaic shares to be between 12.8c and 19.7c.
AGL has made a non-binding offer of 15c per Mosaic share or 1.01 AGL shares per 100 Mosaic shares.
"PWC has advised the Mosaic Board that it has concluded the scheme to be in the best interests of Mosaic’s fully and partly paid shareholders on the basis that it is fair and reasonable," Mosaic said in the statement to the ASX.
"Both the cash and scrip consideration offered by AGL has been determined by PWC to be within the valuation range and considered fair."
AGL Energy Ltd is seeking to buy out Mosaic as part of a strategy to gain control of the target’s gas storage plant in central Queensland.
The Mosaic board recommended the AGL offer unanimously and entered into a scheme implementation deed with AGL in July.
Mosaic says the PWC report will be included with the Scheme Booklet issued to shareholders later this month.
Mosaic shares closed unchanged on 15c.
Fresh from being upbeat about the outlook for its sluggish US Chep business, Brambles has created a US advisory board and appointed two high profile executives to assist the global pallet provider with its American expansion plans.
The supply chain and data management company said yesterday it had appointed former US Secretary of Transport Rodney Slater and John Claringbould, a former executive with consumer goods group Mars.
The board will help develop and manage customer relationships, identify new opportunities, engage government on policy and develop a more innovative culture.
Brambles said the formation of this advisory board and the appointment of these two outstanding individuals will assist.
"Brambles strategic direction and reflects our commitment to strengthening our stakeholder relationships as we expand in the USA," chairman Graham Kraehe said.
Mr Slater served as Secretary of Transport under President Bill Clinton and has extensive knowledge of supply chain and public policy, chief executive Tom Gorman said.
"John Claringbould will be able to share his insights from working at the highest levels of one of the worlds most recognisable food companies."
Brambles chief financial officer Greg Hayes, senior vice president Kevin Shuba, CHEP Americas group president Jim Ritchie and Recall group president Elton Potts round out the board membership.
Brambles shares rose 2c to $5.94.
That’s up 64c, or more than 11% from the level on August 18, the day before the 2010 results were released and the upbeat commentary on the outlook for the US pallet business.
